Private Equity: Vista Private Equity Founder Under Investigation 

Private equity investor Robert Smith is currently under investigation regarding his taxes.  Smith gained recognition when he donated to Morehouse College’s graduating class.  Federal investigators are trying to figure out whether Robert Smith paid his taxes on assets worth millions of dollars. 

Smith is currently innocent and is not accused of any illegal activity, but the U.S. Department of Justice has yet to come out with a decision regarding his tax affairs.  Essentially, Smith’s private equity approach includes leveraged buyouts to technology companies.  These companies provide Smith and his firm with heavy cash flow as opposed to actual assets.  

Robert Smith is on track to become the country’s wealthiest African-American at $5 billion USD.  Vista Private equity began with the help of Robert Brockman.  Brockman was a key proponent in a $1 billion investment in the firm.  This charitable trust is related to the Supreme Court of Bermuda’s judgement referring to “a tax and money laundering investigation.”  According to the judgement, “The investigations related to the tax affairs of Mr Brockman and the suspected evasion by Mr Brockman of tax in relation to more then $2bn of unreported gains made by entities within the…trust structure.”  

According to a letter from Vista, the firm has disclosed the review of Robert Smith’s tax returns in investor materials since 2016.  Vista and its portfolio companies are not under review.